Rathbone Brothers (Rathbones), a provider of investment management services for private clients, charities and professional advisers, is automating its fund settlement process through Euroclear U.K. & Ireland’s (EUI) processing service.
EUI is providing end-to-end automation for the settlement of fund units and related cash movements to the entire Rathbones distributor community. Using the infrastructure provider’s delivery-versus-payment mechanism, cash movements related to subscriptions and redemptions are reflected on the register typically two hours after the notional units have exchanged hands electronically.
This helps Rathbones avoid the risks, costs and reconciliation complications of manual cash processing when payments are decoupled form the unit movements, says John Trundle, chief executive officer of Euroclear UK & Ireland. Automated processing also addresses the highly fragmented, paper-based processing mechanisms in investment fund houses whereby operational staff physically handle unit movements.
“By linking cash and unit settlement, firms can greatly improve their daily treasury operations; cash from proceeds is usually available between 6am and 8am on the intended settlement date and available for the entire business day,” Trundle adds.
The latest deal is an extension of the relationship Rathbones currently has wit EUI for order routing of equities and ETFs.
Andrew Butcher, chief operating officer at Rathbones, comments on the move to automate processes with EUI: “Euroclear UK & Ireland’s service for unit trusts makes perfect sense for us. It is fully scaleable as we can integrate the processes with our UK equity settlements. We are custodian for £22 billion of client assets, so having the benefit of full registry reconciliation transparency which automated settlement affords, plus easier cash management through the CREST cash memorandum account, will prove highly beneficial to our operations teams.”
Developed in partnership with 39 fund organizations, EUIs service handles the placing of a funds order, to the settlement, transfer, reconciliation and corporate action processing of the asset. Trade-to-settlement cycles are cut typically to four business days after the trade is struck compared with up to 10 business days today thereby reducing operational and counterparty risks.
U.K.-Based Investment Manager Automates Funds Settlement Via Euroclear
Euroclear U.K. & Ireland is providing end-to-end automation for the settlement of fund units and related cash movements to the entire Rathbones distributor community.
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